Advertising & Sales Promotion

What is advertising

TV, print, WOM,Internet ,POS

=ATL/BTL

Manage the Noise ,filters

sender

receiver

It is successful when what the sender wants to say is correctly interpreted by the receiver

medium

encode

decode

Advertising Functions

Informing

Persuading

Reminding

Adding Value

Assisting Other Company Efforts

Advertising Functions

Informing

• Makes consumers aware, educates them about the features and benefits, and facilitates the creation of positive brand images

• Facilitates the introduction of new brands and increases demand for existing brands

• Performs another information role by:

Advertising Functions

Persuading

• Persuades customers to try advertised products and services

• Primary demandPrimary demand:

• Secondary demandSecondary demand:

Persuading

Gillette MACH3

Advertising Functions

Reminding

• Keeps a company’s brand fresh in the consumer’s memory

• Influences brand switching by:

Advertising Functions

Adding Value

• Three basic ways by which companies can add value – innovating– improving quality– altering consumer perceptions

• Advertising adds value to brands by:

Advertising Functions

Assisting Other Company Efforts

• Advertising is just one member of the marketing communications team

• Sometimes, an assister that facilitates other company efforts in the marketing communications process

• Examples?

The Advertising Management Process

Advertising Strategy

• Setting Objectives•Formulating Budgets

•Creating Ad messages•Selecting Ad Media and Vehicles

Strategy Implementation

Assessing Ad Effectiveness

Whole Egg Theory

• 1972 by Ed Ney, then president of Y&R International. – offer integrated services-not just advertising but

direct, PR, sales promotion and others-Mr. Ney refers to it as "the Whole Egg."

– During the mid-1970s, Y&R buys numerous companies specializing in non-consumer advertising marketing disciplines, such as healthcare communications shop and direct response agency The name and the concept catch on.

The concept of IMC starts catching on , though it might not ,be from one agency .So agencies from specialised became

diversified

Integrated Marketing Communication

• Involves coordinating various promotional tools ,marketing activities to form a message , rather than only relying on media advertising – Get the consumer at touch-points– Avoid duplication– Consistent message for the product /brand– Maximise the ROI ,more cost effective– Leverage on changing environment /behavior– Focus on actual purchase /trials

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IMC Overview

Tools of -IMC

• Advertising • Direct marketing• Interactive/internet marketing• Sales promotion• PR• WOM• Personal selling • BTL• POS

IMC –planning model

• Review of marketing plan– SWOT :environment/competition/TG/product/distribution/

manpower…

• Define the product message /TG/objective• Understand the best mix of IMC basis the product

/message /TG• Understand the budget • Develop IMC

– Message /strategy/tools of IMC/adapting the message

• Integrate the IMC strategy/execution• Monitor/evaluate & control the IMC

IMC -process

Opportunity

Competition

Target market

Identify Markets

Segmentation-geographic/

Demographic/Psychographic

/VALS/Behavior/benefit

TG

Positioning-product/pricing

TG/benefits

ProductDecision

PricingDecision

Channel/Distribution

Decision

IMC decision

Consumerbusiness

Review Monitormodify

IMC-participants

• Advertisers

• Agencies

• Media companies

• Marketing communication specialists

• Collateral services

IMC objectives

• Stage of the product in PLC

• Awareness

• Recall

• Trials

• Informative

• Consumption

• Repeat purchase

Types of agencies/revenue

• Types– Full services– Creative boutiques– Media buying services– Specialized

• Direct response/PR/interactive/brand management/collateral/MR

• Payment mechanism– Commission– Retainer ship– Retainership + commission

Why agencies lose clients

• Do not understand the TG /product /market well• Do not control their business intelligently/poor

recommendation• Poor service• Poor Communication• Personality clashes• Changes in management /manpower –agency/client• Conflict of interest

How agencies get clients

• Referrals

• Solicitations

• Presentations

• PR

• Image

Persuasion matrixDependent variables-steps in being

persuadedIndependent variables –communication components

source message channel receiver destination

Message presentation

attention

comprehension

yielding

retention

behavior

Source

• Direct /indirect• Credible

– Expertise– trustworthiness

• Attractiveness– similarity – Likeability– celebrity

• power

Source-Celebrity endorsement

• Stage of the product - It depends on what stage of the product life cycle is the brand in.

• Is it a strategic decision over 4, 5 years- brand value must remain consistent with the value of the celebrity being endorsed in terms of personality, positioning. So even if the celebrity changes the values remain consistent ..

• Celebrity–brand match:  , strong enough so that the endorsements are able to strongly influence the thought processes of consumers and create a positive perception of the brand ?

• Constant monitoring mechanism : Are we able to monitor the behavior, conduct and public image of the celebrity  continuously to minimize/maximize  any potential.

• Brand over endorser:  should ensure that this does not happen by formulating advertising collaterals and other communications

• Celebrity endorsement is just a channel: it is one part of the communication mix that falls under the broader category of  marketing. I have observed that the  teams/ sales /CP

• Celebrity ROI: should have a system combining quantitative and qualitative measures to measure the overall effect of celebrity endorsements.

Channel factors= medium to deliver the message

• Personal

• Non-personal

– ATL –type of medium /program– BTL– Noise– Clutter

So Advertising ….

• Includes all activities involved in presenting a non-personal, sponsor-identified, paid-for message about a product or organization.

• Can classify it by:– The target audience: consumers or

businesses– Product/service vs. organization/company– Objective: Primary or selective demand

The Nature of Advertising is..

• advertising is distinguished from other forms of promotion as follows

• it has a verbal and/or visual message• the sponsor of the message is identified• delivery is through recognizable media• there is payment by the advertiser to the media

for carrying the message• advertisers are increasingly being able to reach

specific audiences with tailor-made messages

Advertising to Target Audiences

• advertising can be classified by the target audience to which it is directed

• consumer advertising generally appears in mass media and is directed to end consumers: may be product or institutional in nature

• business-to-business advertising is often called trade advertising and is directed to a business market

What is Being Advertised?

• product advertisingproduct advertising is designed to promote the sale of a specific product or service:– may be direct-actiondirect-action, quick-response– may be indirect-actionindirect-action over a longer time

• institutional advertisinginstitutional advertising promotes the firm or tries to create a positive image:– may promote customer service– or send a public service message

Comparative Advertising

• Selective-demandSelective-demand advertising• Involves comparing a product to its

competing brand• May be:

– Direct, naming competitors outright– Less direct, alluding to competitors (e.g.,

“leading brand”, “Brand X”) but not naming them

Co-operative Advertising• co-operativeco-operative advertising involves the sharing of

the cost of advertising by two or more sponsors: – a manufacturer and retailers (verticalvertical), or – a group of retailers (horizontal(horizontal)

What are the Objectives?

• primary-demandprimary-demand advertising is intended to stimulate use of a category of products

• selective-demandselective-demand advertising is intended to encourage purchase of a particular brand or the products and services of a specific firm

Setting Advertising Objectives

• Expression of management consensus

• Guides the budgeting, message, and media aspects of advertising strategy

• Provide standards against which results can be measured

Budgeting Considerations in Practice

• What is the Ad objective?

• How much are competitors spending?

• How much money is available?

Budgeting Methods

• Percent-of-Sales Budgeting

• Objective-and-Task Method

• Competitive Parity Method

(match competitors method)

• Affordability Method

Percentage-of-Sales Budgeting

• A company sets a brand’s advertising budget by simply establishing the budget as a fixed percentage of past or anticipated sales volume

• Criticized as being illogical

Why??

Objective-and-Task Method

• The most sensible and defendable advertising budgeting method

• Specify what role they expect advertising to play for a brand and then set the budget accordingly

The Competitive Parity Method

• Sets the ad budget by basically following what competitors are doing

Affordability Method

• Only the funds that remain after budgeting for everything else are spent on advertising

• Only the most unsophisticated and impoverished firms

• However, affordability and competitive considerations influence the budgeting decisions of all companies

DAGMAR-defining advertising goals for measuring advertising results

• Communication objective which is SMART– Objectives /measurable– Clear TG– Benchmark & results desired– Specific time frame– Budgets

• Top down/% of sales/affordability• Allocation amongst elements of IMC

Medium Objective Frequency of message

TV Reminder for the brand

Pulsing /just enough to enable recall

Press /print Talk imagery /talk about SKU features

Quite regular in the target markets

OOH medium(best is drops down scrollers at malls/Dispensing units at outlets

Generate a recall and spur a purchase decision

High visibility in malls/shopping arcadesAll areas where consumers can be influenced and where products are available

Consumer connect activities

Establish a direct contact

Sales at schoolsDedicated program for identified cities/schools in IndiaExhibitionConsumer touch poins

Consumer-5 stage decision making process

Problem recognition

Informationsearch

Evaluate alternatives

Purchasedecision

Post purchaseevaluation

Stock out /desire/new need /Dissatisfaction/marketer induced /New products

Personal experience , family, market info, advertising ,Influencers, peer group , trade ,existing users…

Evoke set , criteria defining need , demographics ,budgets,Urgency of the need -want /motivation for the need

Decision to buy , decision to buy a particular brand , budget,time taken to actually buy after the decision ;changes with theProduct /budget /urgency

Cognitive dissonance-satisfaction /dissatisfaction

W

O

M

Consumer-internal psychological process

Motivation

Perception

attitude

Integration

learning

Maslow’s hierarchy ;psychoanalytic theory , MR (In depth intProjective technique, association tests, FGD

Sensation ; selecting information ; interpreting informationIt is a filter of the receiver for information from the sender..e.g. can be selective perception /selective exposure/Selective comprehension /selective retention Mnemonics /sublime perception is used to create stimuliFor awareness

Multi attribute model; changes strategies/execution of msg

Consumer combine info /characteristics of a product & Compare ; heuristics is also used

Behavior approach , cognitive learning

Consumer-learning – Behavior Approach

• Theories are based on STIMULI RESPONSE orientation– Classical conditioning-learning is an associative process. It

assumes the individual is a passive participant who simply receives stimuli . 2 things are important

• Contiguity – unconditioned/conditioned stimuli must be close in time & space ..proximity /physical presence

• Repetition – frequency of association . More often the unconditioned/conditioned stimuli occur –there would be an association

– E.g. Pavlov experiment : Bell is a conditioned stimuli to unconditioned stimuli :food & unconditional response :saliva

• Advertisers use images/figures/celebration to build as association which evokes a response from the consumer

Consumer-learning – Behavior Approach

• Theories are based on STIMULI RESPONSE orientation– Operant conditioning –here the individual actively operates or

acts on some aspect of the environment for the learning to occur. The individual’s response is instrumental in getting a positive reinforcement (reward) or negative reinforcement (punishment)

• reinforcement is important– Can be continuous– Can be partial or intermittent

– All of it might lead to shaping of behavior patterns

Consumer-Cognitive Learning theory

goal Purposive behavior

insight Goal achievement

-Perception /formation of belief / attitude development /environment integration all are important to the decision making processAll the 5 stages of consumer decision making process are relevant

Culture

Sub-culture

Social class

Reference groups

Situational-determinants

EXTERNAL FACTORS

INFLUENCING

CONSUMER

BEHAVIOUR

Consumer –decision making process

• Problem recognition need/repeat purchase/desire/greed– maslow’s hierarchy– Psychoanalalytic theory –Sigmund Freud– MR probes needs-in depth interview/FGD/association

tests/projecting techniques

• Information search• Alternatives evaluation• Purchase decision• Post purchase evaluation –cognitive dissonance• Recommendation-WOM

Internal psychological process

• Motivation• Attitudes/beliefs /baggage • Culture

– Subculture/social class/reference groups/influencers

• Perception-visual/sensory/psychological• Attitude formation• Integration • Learning

Models of response process-traditional

AIDA model

Hierarchy effects model Innovation adoption model

Information Processing model

Cognitive stage

attention Awarenessknowledge

awareness PresentationAttentioncomprehension

Affective stage

InterestDesire

LikingPreferenceconviction

Interestevaluation

Yieldingretention

Behavioralstage

action purchase Trialadoption

behavior

3 order model of information processing – Michael Ray

High Low

high (learning model )

Cognitive Affective Conative

(low involvement model)CognitiveConativeaffective

low (dissonance /attribution model)ConativeAffectiveCognitive

FCB grid-consumer response-Richard Vaughn of Foote, Cone & Belding advertising

agency

thinking Feeling

High involvement Informative-IT/cars Media- long copyCreative –info demo

Affectivefashion/j wellery/mobikesmedia-large space /imagecreative- exceptional impact

Low involvement Habit formation-household productsMedia-small space adsCreative -reminder

Self-satisfaction-cigarettes/liquor/candyMedia-billboard/POS/newspaperCreative -attention

Basic emotion

Basic opposite

Joy Sadness

Trust Disgust

Fear Anger

Surprise Anticipation

Sadness Joy

Disgust Trust

Anger Fear

Anticipation Surprise

dvanced emotion

Composed of...Advanced opposite

Optimism Anticipation + Joy Disappointment

Love Joy + Acceptance Remorse

SubmissionAcceptance + Fear

Contempt

Awe Fear + Surprise Aggressiveness

DisappointmentSurprise + Sadness

Optimism

RemorseSadness + Disgust

Love

Contempt Disgust + Anger Submission

AggressivenessAnger + Anticipation

Awe

Creative Communication ?

• Is the product positioned simply , with clarity• Does it show a a clear benefit • Does it contain a powerful idea• Does it talk about the brand personality• Is it unexpected /memorable• Is it focused• Does it reward the viewer with something –

tangible/intangible• Is it visually exciting /attention grabbing• Is it well made

Creative Strategy-planning involves :

• Challenge– Brief, TG, SMART objectives – Research =product/competition/TG habits & behavior/media

• Quanti -quali/ focus groups/ethnographic (observing consumer in the natural environment)

• Evaluate storyboards/concept testing /animate

• Risks– Ability to do the right thing , not necessarily the obvious

• Personnel– Client, agencies, consumer

• Process– Rigor, time , budgets, understanding of the personnel /audience ,media type

• Young’s model :immersion, digestion, incubation, illumination, verification• Graham Wallas : Preparation, incubation, illumination, verification

Creative Strategy-development involves

• Communication of a product is developing a series of messages (which make up an IMC ) which is a set of interrelated ideas and coordinated activities that revolve on the core central theme during a specified period

• Developing the unifying theme is the critical objective of a campaign

Copy Platform

• 2 critical components of the copy platform are the development of the major selling ideas and the creative strategy development– Basic problem– IMC objectives– TG– Major selling idea– USP /Positioning– The brand image desired– Creative strategy , the inherent drama– Supporting information required

Creative -Appeal

• Informational/ Rational

• Emotional

• Rational + Emotional

• Reminder

• Teaser

Communication -Execution

• Straight /factual• Scientific/technical• Demonstration• Comparison• Testimonial• Slice of life• Animation• Personality symbol• Fantasy• Drama• Humor• Combinations

Creative –Tactics..eg

• Print– Headlines :direct/indirect/sub heads– Body copy– Visual elements– layout

• TV– Video– Audio – voice-over/needle-drop/jingle– Script– Production – PPC/production/post production

Creative approach- Client Evaluation

• Is the creative approach consistent with the brief , brand objectives

• Is it consistent with the creative strategy objective ?Does it say what was intended?

• Is it appropriate for the TG?• Does it communicate clearly /convincingly?• Does the creative execution overwhelm the brand /

brand objectives ?celebrity endorsements?• Is it appropriate for the media environment?• Is it truthful and tasteful ?

– Can be checked through • Informal discussion /research /informal feedback /test market

5 - 69

Creative Brief

What is . . . • The objective• The target audience• The message theme• The support• The constraints

5-70

The support claims highlighted in this advertisement is that MicroThins are:

• 30% thinner• 40% lighter• 4 times more scratch resistant• 10 times more impact resistant• 99.9% UV protection• Anti-reflective

The Support

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Creative Brief - Del Monte

• The Objective – increase awareness of the smaller-size cans with pull-top lid.

• Target Audience – senior citizens, especially those that live alone and suffer from arthritis.

• Message Theme – the new cans not only contain a smaller portion but are easier to open.

• Support – 30¢ intro coupon to encourage usage.

• Constraints – copyright logo, toll free #, Web site, legal requirements of a coupon, and what is meant by a small serving.

5-72

Del Monte Advertisemen

t

Based on the Creative Brief in the previous slide.

5 - 73

Left – Right Brain Ads

• “Left brain” advertisement Logical, rational side of brain Manages numbers, letters, words, and

concepts Rational appeal

• “Right-brain” advertisement Emotional side of brain Manages abstract ideas, images, and

feelings Emotional appeal

An Advertising Campaign (Steps 1 and 2)

1. Transforming a theme into a coordinated advertising program to accomplish a specific goal.

2. Objectives of the campaign determined by firm’s overall marketing strategy. Typical objectives are:

– Support personal selling– Improve dealer relations– Introduce a new product– Counteract substitution– Expand use of a product category

The Advertising Campaign (Steps 3 and 4)

• Creating a message that:– Gets and holds the attention of the intended

audience.– Influences the audience in the desired way.

• Selecting media involves:– The choice of a medium such as television, radio,

newspaper, or magazine.– The specific category of the selected medium to be

used, such as special interest (Chatelaine) vs. general interest magazines (Maclean’s).

– The specific media vehicles.

The Campaign Budget

• A budget must be allocated among the various activities comprising the overall promotional program.

• Promotional budgets can be extended with co-operative advertising.

Advertising Goal

• A specific communication task to be achieved to a specific degree to be communicated to a specific target audience in a specific period of time.

How much to spend?

• ‘Half my advertising is wasted, but the trouble is I do not know which half

- John Wanamaker

5 - 79

Advertising Management

• Evaluate role of advertising in IMC program.• Select in-house or external agency.• Develop advertising management strategy.• Develop creative brief.

5 - 80

External Agencies

• Advertising agencies• Media service companies• Direct marketing agencies• Consumer and trade promotion

specialists• Public relations firms

Boutique ------------------ Full-service

5 - 81

Choosing an Agency

1. Set goals.2. Select process and criteria.3. Screen initial list of applicants.4. Request client references.5. Reduce list to 2-3 viable agencies.6. Request creative pitch.7. Select agency.

5 - 82

Evaluation CriteriaSelecting Advertising Agency• Size of agency• Relevant experience• Conflicts of interest• Creative reputation• Product capabilities• Media purchasing capabilities• Other services available• Client retention rates• Personal chemistry

5 - 83

Advertising Planning and Research

• General pre-planning input• Product specific-research

– Major selling idea• Qualitative research

– Anthropology– Sociology– Psychology

• Value and lifestyle model (VALS)

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Key Advertising Personnel

ClientMarketing Manager

AccountExecutive

Creative

CreativeDirector

TrafficManager

MediaBuyers

&Planners

ClientMarketing Manager

ClientMarketing Manager

Creative Creative Creative

1. Review communication market analysis.

2. Establish advertising portion of IMC objectives.

3. Review advertising budget.

4. Select media.

5. Prepare creative brief.

Steps in Advertising Campaign Management

5 - 86

1. Communication Market AnalysisReview

• Competitors• Opportunities• Target markets• Customers• Product positioning

5 - 87

• To build brand image– Top of mind– First choice

• To inform• To persuade• To support other marketing efforts• To encourage action

2. Advertising Goals

5 - 88

3. Advertising Budget

• Continuous schedule• Flighting schedule• Pulsating schedule

Manner of Distribution:

Media selection

• The most cost effective media mix to ensure achievement of the advertising goal.

How should you select media?

• Reach

• Frequency

• Impact

Reach

• No. of persons exposed to a particular media schedule at least once during a specified time period

Frequency

• No. of times within the specified period that a person is exposed to that message

Impact

• Qualitative value of an exposure through a given medium

• GRP (Gross rating points) = R * F

• Wt. GRP = R * F * I

Choosing Media

• Objectives of the ad.• Audience coverage.• Requirements of the message.• Time and location of the buying

decision.• Media cost (CPM)• Media characteristics.

Characteristics of Key Media

• Newspapers: flexible, local• Television: versatile, powerful but costly,

fragmented• Direct Mail: personal, selective, effective, but

tough• Radio: strong locally, cheap but single

medium• Magazines: top quality, little flexibility

• out-of-home advertising• specialty advertising• emerging media:

– World Wide Web– infomercials– place-based media– videos and CD-ROMs– yellow pages

More ..Key Media

Evaluating the Major Media

• newspapers are flexible and timely, have a local orientation and wide coverage, low cost

• television is versatile, but audience is now fragmented, reaches mass audiences

• direct mail is efficient, targets certain audience

More Media Evaluations

• radio stations target specific segments, low cost, local orientation, short message life

• magazines deliver quality advertising to specific segments, message stays around

The Changing Nature of Media

• media are becoming less mass, more targeted• cable TV offers many specialty channels• direct-to-home TV adds to fragmentation• lots of new out-of-home media• Yellow Pages and other directories on CD-ROM• place-based media where they shop and live• advertising on the Web works as Yellow Pages does

-- the customer seeks out the advertiser

Evaluating Advertising

• It is difficult to measure the sales effectiveness of advertising because:

– Ads have different objectives.– Ads can have an effect over time period.– Measurement problems.

• Effectiveness can be tested:– Before an ad is presented.– While it is being presented.– After it has completed its run.

SMART

Sales Promotion

• Whereas advertising gives a reason to buy, SP gives an incentive to buy

PERSONALSELLING ADVERTISING

PUBLICITY SALESPROMOTION

Sales Promotion

Sales Promotion

Objective: Bolster/complement other promotional mix elements during a specific time period

Targeted toward:• Sales force• Wholesalers and retailers• Consumers

Definition: any activity or material used as a direct inducement to purchase

Rebates, cents-off-

Contests, games & sweepstakes

Product sampling, demonstrations

Coupons, refunds

Sales Promotion Methods for Consumers

Multiple purchase offers,Frequent-user incentives

P-O-P material

Product placements/tie-ins

Premiums

Sales Promotion Methods for Consumers

Classifying Types of Sales Promotion

PromotionalPromotionalpricingpricing

Non-priceNon-pricepromotionspromotions

SamplingSampling

• Price reductions

• Free goods

• Tied offers

• Money off next purchase

• Loss leader pricing

• Cheap credit

• Contests

• Free gifts

• Self-supporting offers

• Multi-brand promos s

• Guarantees and added services

• Most effective in the early stages of a new product launch (#1 use for coupons)

• Important for food products

• Very expensive

Rebates: A Consumer Information Source• Buyers fill out rebate forms with names, addresses and household data about customers

- directly targets price cuts to customers

- 5-10% are redeemed (A Phantom discount)

Pepsi offers a $5 rebate on the Home Alone video

Rebates are often effective at changing purchase probabilities, even for big-ticket items

Coupons, too, can be effective at getting consumers to purchase specific products

• Trade shows• Contests, free merchandise• Display equipment, P-O-P materials• Cooperative advertising & promotions

– Vertical - channel members– Horizontal - group of retailers

• Allowances (buying vol., buy-back, scan-back, merchandise)

• Premium or push money, slotting allowances

Sales Promotion - Methods for the Trade

Trade Shows

Maintain relationshipMaintain relationshipTransmit messagesTransmit messages to key accountsto key accountsRemedy problemsRemedy problemsAdd-on salesAdd-on sales

Selling objectivesSelling objectives Non-selling objectivesNon-selling objectives

CurrentCurrentcustomerscustomers

PotentialPotentialcustomerscustomers

Maintain imageMaintain imageTest productsTest productsGather competitiveGather competitive intelligenceintelligenceWiden exposureWiden exposure

Contact prospectsContact prospectsDetermine needsDetermine needsTransmit messagesTransmit messagesCommit to call backCommit to call back or saleor sale

Contact prospectsContact prospectsFoster image buildingFoster image buildingTest productsTest productsGather competitiveGather competitive intelligenceintelligence

Sales Promotion

•Advantages:•Motivation method for special efforts•Short-term sales increase•Defined target audience•Defined role/objectives•Indirect roles (e.g., wider distribution)

•Disadvantages:•Only short-term•Hidden costs•Confusion•Price cutting -Brand image•Postponement effect•Significant government regulation

•Lack of effectiveness sometimes (learning effect)

A Benefit Congruency Framework of Sales Promotion Effectiveness

Are monetary savings the only explanation for consumer response to sales promotions?

If not, how do the different consumer benefits of sales promotion influence its effectiveness?

Savings Quality

Convenience Value expression

Exploration Entertainment

Six Benefits

Sales Promotions Benefit Matrix

*

Free Product Offers

*

* Sweepstakes

* Coupons

* *Price Reductions

RebatesLow

Low

High

HighUtilitarian

Hedonic

Free Gifts

Positioning Map

Role of The Promotion Mix• Promotion is an organization’s unique set of

communications (stimuli) designed to influence (inform, persuade & remind) selected target audiences into desirable responses.

• Who says what to whom, in what setting , by which channels, with what purposes.

• Promotion facilitates (efficient) exchange

Advantages of SP

• Induces trials

• To reward loyal customers

• To induce stocking by the trade

• Adjust to short term variations in trade

• Liquidating inventories

• Preempting competition

Disadvantages of SP

• With too many promotion schemes ‘promotion clutter’ confuses consumers

• Attracts ‘brand switchers’ and ‘deal prone’ customers

• Dilutes brand equity• Preponement of purchases• Lowers margins • Expensive and wasteful, when not handled

properly

Types of SP

• Trade

• Consumer

Developing a SP campaign

• Planning the programme

• Duration

• Incentive to be given

• Assessing viability

• Pretesting

• Implementing and controlling

• Evaluation

Sales Promotion

• Demand-stimulating devices designed to supplement advertising and facilitate personal selling.

• Sales promotions include such things as coupons, in-store displays, premiums, trade shows, in-store demonstrations, and contests.

• The target for these activities may be middlemen, end users, or the producer’s own salesforce.

Results of Sales Promotion

• It can produce short-term results.• Competitors are using sales promotions.• Sales promotions are attractive to price-

conscious consumers.• Can enhance/facilitate retail salesmanship

which is often of low quality.

Key Reasons for Sales Promotion

• Stimulating end-user demand.– Sampling program for new/improved

product• Improving the marketing performance of

middlemen and salespeople.– Sell more, win a holiday trip.

• Supplementing advertising and facilitating personal selling.– Displays, promotional giveaways

Managing Sales Promotion• Select from wide range of techniques, depending on your

objectives• Select promotional devices based on:

– Nature of target audience– Your promotional objectives: Push vs. Pull.– Cost of device-- sampling can get costly.– Current economic conditions-- coupons, rebates

work best in recessionary period.• Evaluating Sales Promotion:

– Much easier than with advertising.– Usually clear start, finish, goal.

Public Relations

• Involves a variety of programmes to promote or protect a company’s image or products

Functions of PR

• Media relations

• Product publicity

• Corporate communications

• Lobbying

• Counseling

Public Relations• A tool designed to influence favourably attitudes

towards an organization, its products and policies.• Public relationsPublic relations is often overlooked by management

because of:– Organization structure; not in marketing.– Inadequate definitions; loosely defined.– Unrecognized benefits; many non-believers.

Publicity

PublicityPublicity is a form of public relations that includes any communication about an organization or its products that is presented by the media but is not paid for by the organization.

Strengths of Publicity• Can announce new products, recognize employees,

report good results, breakthroughs.• Key Benefits:

– Lower cost than advertising or personal selling.

– Increased readership; advertising ignored often.

– More information.– Timeliness.

Weaknesses of Publicity• Some loss of control over message.• Limited exposure; only happens once.• Not free; preparation costs.